Market Overview

Alibaba Conference Call Highlights

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Alibaba Group Holding Ltd (NYSE: BABA) reported its third quarter earnings on Tuesday. Shares of the company are up 3 percent.

Below are the key highlights from its conference call.

• We grew gross merchandise volume across our China retail marketplaces by 49%.
• The overall GMV growth of 49% year-on-year is an acceleration from the GMV growth rates.
• One key reason for this strong GMV growth is the continued growth in active buyers.
• Our platform engages users with strong commercial intent, and you will recall that an active buyer is someone who came to our retail marketplaces.
• For the 12 months ending September, our annual active buyers increased to 307 million.
• Annual active buyers for the year ending in September amounted to a 52% year-on-year increase from 202 million a year ago.
• And continues the strong growth trend we have seen over the last several quarters.
• Overall for context, when you consider 307 million active buyers this means that a number of consumers that equals almost the entire population of the United States is shopping annually on our China retail marketplaces.
• 307 million Chinese consumers represents only about half of the Chinese Internet user population, and less than a quarter of the total population of China.
• Alibaba leads the China mobile commerce market with 86% share of total mobile GMV.
• In September we saw 217 million monthly active users across our mobile commerce apps and the most important of which is the mobile Taobao app.
• This is an increase from the 188 million MAUs we reported for June.
• This is a net add of 29 million mobile users in just three months.
• For context, 29 million people is larger than the population of Texas.
• In the September quarter we saw $32 billion in mobile GMV up from $9 billion a year ago, representing more than the tripling of mobile GMV year-on-year.
• Today we are reporting that mobile GMV now accounts for 35.8% of our total GMV for the September quarter, up significantly from 14.7% a year ago.
• If you look at how much mobile business we do every year for the 12 months ended September, we saw $95 billion in mobile GMV on our China retail marketplaces.
• I don't think you can find another company in the world that drives $95 billion in consumer retail transactions through their mobile apps.
• Maggie will address mobile revenue in more detail but we are reporting today that 29% of our total revenue across our China retail marketplaces is now being derived from mobile.
• 19% of our revenue being derived from mobile.
• Looking at the year-on-year comparison, mobile revenue in this quarter represents a more than 1,000% increase from a year ago.
• Mobile revenue divided by Mobile GMV on our China retail marketplaces, increased to 1.87% in September quarter.
• We are set to integrate our newly acquired business UCWeb and AutoNavi.
• Both bring crucial strategic advantage to Alibaba, namely mobile browsing and mapping products.

Performance and Financials:

• GMV grew 49% year-over-year to RMB556 billion and was up 11% sequentially.
• Revenue grew 54% year-over-year to RMB16.8 billion and it was up 6.5% sequentially.
• Our blended monetization rate was steady at 2.3% versus 2.31% a year ago.
• Non-GAAP EBITDA margin was 51%.
• The blended monetization rates across PC and mobile devices is stabilized 2.3%.
• Year-on-year our revenue grew 54%.


• We are now providing market or expense guidance but our overall view is that our core business and cash flows are very healthy.
• So we have the logic to continue to invest in new initiatives such as accelerated expansion.
• Pre-SBC cost of revenue was RMB4.4 billion.
• Pre-SBC operating expense was RMB4.5 billion.
• Pre-SBC product development expense was RMB1.9 billion.
• Pre-sales and marketing expense was RMB1.6 billion.
• Our adjusted effective tax rate was 17.6%, up slightly sequentially.
• We also generated RMB8.9 billion of free cash flow in the September quarter.
• CapEx expenditures were RMB3.4 billion, and increase from RMB1.1 billion in the year-ago period and RMB1.3 billion in the June quarter.

Posted-In: conference callEarnings News


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